Unintended consequences: Older, well-kept character homes take a value hit from city of Vancouver’s anti-demolition policy

BARBARA YAFFE (VANCOUVER SUN) — Ian Todd was surprised to learn last month, entirely by chance, that a new city of Vancouver policy aimed at preserving west side character homes has reduced the value of his own property by at least $500,000.The retired former executive secretary for the Pacific Salmon Commission says he was advised by builder Steve Dhami, architect Loy Leyland and Realtor Kathy Watkinson that his charming, well-kept Second Shaughnessy home, on a lot that is 66 feet wide, is worth $500,000 to $600,000 less than a few months ago.He’s not alone. In Shaughnessy, 329 homes were built before 1940. And another 17,500 of a total of 68,400 homes in single-family zoned areas throughout the city are also pre-1940, many of them doubtless having character merit.Todd expects when all these other homeowners learn what city policy has done to their property values, the fur will start flying.City Council earlier this year ordered restrictions on demolitions after public opposition to the widespread tearing down of character homes on the city’s west side. The measures “to identify and encourage retention of pre-1940 character houses” are intended to be temporary as the city was already reviewing its heritage practices, according to a June 2014 report to City Council.The report says that character homes make up as much as half the housing stock in Arbutus, Dunbar and Kerrisdale.Of all homes demolished in Vancouver between 2009 and 2013, 40 per cent were built before 1940. Often these homes were smaller than zoning permitted, and lacked amenities like master bathrooms and walk-in closets.Now any pre-1940 home with “character merit” ­— based on criteria such as roof form, front porch, exterior wall materials — is subject to the new, restrictive rules to discourage demos.But such a designation is a kiss of death, automatically causing property values to plummet.That’s because any new purchaser of a character-designated house cannot easily knock down and build anew, which is what most buyers these days want to do with older homes.Dhami, of Skyline Construction, said the new policy means character homes, if demolished, can be replaced only by homes smaller than the ones that are allowed on lots where non-character and post-1940 homes were demolished.So Todd’s house conceivably could be demolished. But any replacement home would have to be nearly 1,000 square feet smaller than the house that is about to be built on a similar-sized lot right next door, where a deteriorating home lacking character merit awaits the wrecker’s ball.And because the buyers next door face no such restrictions on their new build, that lot sold for $3.5 million in April. Todd’s home, after being designated as having character merit in September, is valued at $3 million.It’s worth noting that someone buying Todd’s home could apply for city permission to renovate and build an addition, making the existing home as big as the one to be built next door. But that would be far more expensive and complicated than just knocking down and building new.Dhami insists that in Vancouver’s market today, no one would buy Todd’s home at full market price just to face the hassle of renovating.Todd’s next step is to see whether the municipal tax authorities lower his property assessment accordingly, so his $12,000 a year property tax bill will be reduced.Clearly the city’s new character home policy is poorly designed, having been fashioned and implemented without community consultation. Even the Vancouver Character House Network, which opposes demolition of character homes, criticizes the city for failing to consult: “The public needs to be involved.”The city’s interim measures also reek of unfairness and may have unintended consequences.Here’s what can happen: If someone buys Todd’s house and demolishes, accepting the city’s size limits, the owner would not need a development permit from the city; he’d have a free hand in designing a replacement house. He could build an, albeit small, ultra-modern monstrosity, Dhami says.The developer also points to inequity in the city policy. Todd’s neighbour’s house has no character merit and wasn’t well maintained, yet city policy is discriminating against Todd’s beautifully maintained property.Vancouver Realtor David Setton, on his website, features an Oct. 22 article he wrote titled: “The City of Vancouver has just devalued your home.”Setton writes, “It seems very unfair to penalize people that live in older homes,” and boasts of knowing “a handful of buyers that understand how best to present information to the planning department, and give you your best chance of avoiding having your home be assessed with character merit.”Despite receiving full details on the Todd case, Vancouver planning director Brian Jackson insisted: “We disagree that the city’s actions have resulted in a loss of property value. There are several creative ways where an architect could achieve the same or even more density than if the house was demolished.”Dhami agrees, but it would involve costly and complex renovations — something that thereby makes the home less marketable and thus, less valuable.Todd and his wife Joan, a retired school teacher, raised their two daughters in the West 32nd Avenue home. Todd recalls having to scrape up a $5,000 down payment in 1961 to purchase the home for $23,900. The couple lived without a fridge for a while because they could not afford one.Joan Todd, 78, uses a walker and Ian Todd, 79, was recently fitted with a pacemaker. They may find themselves having to sell at any time.When the many owners of character-designated homes become aware they face a situation similar to that of the Todds, the city is likely to face a backlash, perhaps strong enough to convince a new council to revisit this onerous policy.